In November 2001, the J Paul Getty Trust and the British Museum jointly hosted a conference in Venice at which cultural leaders considered the challenges faced by larger arts organizations. The meeting was attended by the directors of opera companies, theatre companies, museums, galleries, orchestras and ballet companies from throughout Europe and North America. This essay set the scene for the conference.

The context in which larger cultural institutions operate in North America and Europe has changed radically over the past two decades and there is broad agreement about the nature of those changes and their impact on the sector:

  • Cultural organizations play – and are expected to play – an increasing number of roles in contemporary society, and their specifically cultural roles have been joined by, and often overshadowed by, more 'instrumental' responsibilities as agents of economic development, tourism and social cohesion;
  • Attempts to fulfil these roles satisfactorily have placed overlapping demands on institutions for which they are not necessarily either funded or staffed adequately;
  • The more recently articulated roles are generally the more easily funded and many arts organizations therefore experience increasing difficulty in advocating - or indeed in some cases even articulating – their more traditional functions and responsibilities in a way that is sufficiently compelling to secure the funds to resource them;
  • They therefore experience - and can be expected to continue to experience – increasing organizational and financial stress, caused by a mismatch between the expectations placed upon them both internally and externally and their capacity to meet them;
  • They respond to these stresses with a range of strategies based on their individual historic strengths and weaknesses (or assets and liabilities), the perceived agendas of their funders, and the quality of institutional leadership. But behind the wide variety of programming and funding strategies lies the same identifiable pattern of common pressures.

This argument, or parts of it, has been made about symphony orchestras, museums, opera houses and theatres in the United States, Great Britain, France, Germany and Italy. Indeed, the traumatic events of September 11 and their aftermath provide a case in point. As commentators and practitioners have discussed the impact of the events, two sets of consequences in particular have been articulated:

  • That there will be an adverse impact on inflows of both contributed and earned income, as other more immediately crisis related philanthropic causes pre-empt available funding and as visitor and audience numbers decrease, at least temporarily (both effects compounded by world recession). In parallel, the logistics of touring programmes and loans will be disrupted and programming costs therefore increased; and
  • That the world crisis should – or in some variants simply will – precipitate a further reappraisal, or at least refinement, of the assumed responsibilities of cultural institutions. For example, they will seek to assume a greater responsibility for encouraging a deepening understanding of the richness and diversity of Islamic culture and values at a time when the dangers of religious intolerance and cultural prejudice are heightened.

The net result of these two reactions to the events – assuming the first is a correct assessment of the financial impact on cultural institutions and the second a correct assessment of the programmatic response by them – is a further layer of responsibility unmatched by identifiable resources or, in some cases, skills.

When a given art form in a given country is described as 'in crisis', as they periodically are, that crisis is, as often as not, a manifestation of the inability or reluctance of cultural leaders to articulate in a compelling way their own institutional priorities and limitations in the face of the inevitable mismatch between limited resources and unlimited expectations.

This state of affairs could simply be attributed to a failure of leadership in the cultural sector. This would, however, be both unfair and oversimplistic. There are at least four factors at work that would appear to have a profound impact on the modus operandi of leaders of the arts community and that heighten the challenges of effective leadership. They are: the changing climate of critical opinion in which cultural institutions operate; the impact of the rapid globalisation of the world economy following the end of the Cold War; the increasingly contingent and contractualised relationships with funding bodies; and the changing social and political priorities reflected in those relationships.

The changing nature of critical debate about cultural institutions

The past twenty years have witnessed an unprecedented growth in academic reflection on the roles of cultural institutions as creators and repositories of particular values and hierarchies, rather than as passive repositories of the cultural legacy of the past or neutral commentators on the present and future. This has left many institutions, particularly those carrying a heavy historic legacy, tongue-tied as they have become more cautious about articulating unequivocal statements of purpose. Received academic opinion has increasingly reflected a broadly sociological perspective that sees social and cultural institutions as products of – and vehicles for the perpetuation of – specific sets of values and beliefs. Institutions like museums or theatres are, in other words, seen as serving to legitimate particular power structures and to make the unequal distributions of power that we see across the world appear simply as 'the way things are'. This is the broad thrust of the paradigm of cultural studies and critical theory.

National museum collections, for example, are now regarded by a significant body of opinion-formers as broadly imperial in their impact and the institutions that house them a-historical, naive or disingenuous in their own expression of that impact. Or at least they are as often seen in this context as they are viewed as early expressions of political commitment to currently resonant beliefs in broad public access to life-long learning - a reasonable early twenty-first century gloss on the nineteenth and early twentieth century ideals that informed the establishment of many public museums, opera companies, and theatres throughout Europe and the United States.

The debate about the relationship between cultural institutions and the institutionalisation of values has generated extensive coverage. Exchanges conducted in academic circles and the cultural press have permeated the climate of opinion more generally, leading to more public discussion of the extent to which cultural institutions are vehicles of particular ideologies and propagators of particular sectional interests. Cultural leaders are aware of and sensitive to these debates, and in many cases they are active participants in them, grappling with their interpretive, programmatic and curatorial implications.

Notwithstanding their professional engagement with the issues, the net impact of these phenomena has been to temper and undermine, rather than to consolidate, the intellectual confidence with which those in leadership positions articulate the place of their institutions in the contemporary world. In moving to safer ground and articulating the role of the cultural building as civic space (or icon) or as generator of tourist income, or as an adjunct to the formal educational sector, the core of the institution – furnishing a cultural or historical experience – has often been downplayed. This reliance upon an 'instrumental' perspective has made the value of the asset itself contingent upon whether it is an effective means to secondary purposes.

Parenthetically, science museums and children's museums have found their task less complex – the territory of mainstream science is less hotly contested and the sociology of science is less noisy than the sociology of culture (although this may change with the issues surrounding the handling of such topics as genetic engineering). These institutions have, as a result, found a firmer footing in society. Their expansion and organizational self-confidence has been one of the distinctive trends of the museum sector in the past twenty years.

Globalisation and its discontents

Globalisation comprises the lowering of international barriers to travel, trade and employment and to the flow of information, ideas, fashions and, ultimately, values, together with the acceleration of these flows by technology-driven reductions in the cost of such traffic. Specific measures of the pace of globalisation vary according to whether one is measuring the diffusion of ideas, capital, goods or services. But the general phenomenon and its exponential acceleration are an unmistakable trait of contemporary life.

As the pace of globalisation accelerates, the social and economic value attached to things that are either unique or that excel on a global scale of measurement inevitably increases; in turn, institutions wishing to – or, more likely, needing to – be distinctive in a global context are forced to reflect on the sources of their own competitive advantage. Those institutions that do not have either distinctive assets or the capacity to develop distinctive sources of competitive advantage languish, as human and financial resources and public attention refocus on those that do have the assets and the capacities to exploit them.

As a result, there is an increasing polarization within the cultural sector itself – as in other sectors – between those institutions that have the assets with which to compete aggressively and those that do not. Those institutions with particular strengths – whether in their collections, their programming, their location, the distinctive characteristics of their performance style, the imagination applied to their display, or in the iconic distinctiveness of their architecture - have been the beneficiaries of 'customer loyalty' in its many manifestations. The impact of globalization has been, and will continue to be, a polarization between the 'haves' and the 'have nots'.

Those that do not enjoy or have been unable to develop competitive advantages are in the process of falling noisily and painfully by the wayside. A recent report on the performing arts in America commissioned by the Pew Charitable Trusts from the RAND Corporation produced convincing evidence of the hard times ahead for mid-sized companies that have neither the cachet of the largest cultural institutions nor the manoeuvrability and niche constituencies of smaller organizations. The recently completed review of the fate of regional museums in the United Kingdom undertaken for the Department of Culture revealed a similar picture. A trawl of European evidence would doubtless uncover further confirmation of the trend.

The critical standards of the publics for whose resources and attention cultural institutions are competing is extremely high, primarily as a result of lower travel costs, ready access to comparable 'products' or 'experiences', and the sophistication of other organizations which are explicitly competing for their attention. In addition to peer institutions nationally and internationally, culture's competitors include universities (for scholarship), the leisure and entertainment industries and competing cultural institutions (for visitors and audiences), the entire cultural sector as well as sports (for sponsors) and the charitable sector (for philanthropy).

For actual and potential audiences and visitors, live performance and artefacts on plinths are also competing for attention with in situ audio and video, with artefacts visited by way of increasingly inexpensive travel, and with exhibitions, objects and performances accessed virtually and enhanced electronically through inexpensive technology. The specific experiential, contextual and locational advantages of being in a particular place at a particular time to 'consume' culture may need to be made more readily apparent if audiences are to be sustained. (It is the 'particular time' constraint that puts the performing arts at some disadvantage vis a vis thevisual arts when making their respective pitches to increasingly harried and leisure-time-deprived audiences.)

Leading cultural institutions are located in a distinctive position with respect to globalisation. On the one hand, the world-class and distinctive nature of their skills, assets and location has meant that they are beneficiaries of many aspects of globalisation – at least in terms of visitor and audience numbers, profile and scope for generating earned and contributed income. They are on an historic roll. On the other hand, they are forced, willy-nilly, to meet international standards in areas well beyond those where their natural advantages lie – they cannot 'choose' to compete; they are forced to.

The contractualisation of relationships with funders

Public sector funding bodies and private foundations have tended increasingly to contractualise their funding relationships with cultural institutions and to emphasize in those implicit or explicit contracts the aspects of performance that are most readily quantifiable and that support directly their stated funding strategies – whether those strategies are government policy or foundation mission. The tendency of foundations to be highly directive in their funding has been memorably characterized by Robert Brustein as 'coercive philanthropy' – philanthropy with lots of strings attached. These funding agencies have, in turn, had the effect of de-emphasizing those aspects of cultural institutions' activities that are more qualitative in nature or that are less obviously supportive of their own political or institutional agendas. This trend toward demonstrable proof of performance in pursuit of an externally set agenda has been accelerated by a general decline in thestatus of the public service sector vis a vis the values of the private sector and, in the case of public sector institutions, in the extent to which the actions and stated intentions of public servants are taken on trust.

The administrative and political revolution that swept Western democracies in the 1980s and 1990s replaced a faltering post-war Keynesian consensus with a more ideologically polarized political culture. Managerial mechanisms such as compulsive competitive tendering, privatisation and out-sourcing translated a broader philosophy with respect to the relationship between the public and private sectors into detailed programs that had a profound impact on the operation and extent of the public sector in every advanced democracy. This managerial philosophy was, for the most part, introduced during a period of retrenchment rather than growth, creating an umbilical link in most people's minds between cuts in available funding and the introduction of private sector management tools and language.

The approach was informed by an emotional conviction – supported by a theoretical framework - that, all other things being equal, public sector management is less efficient and effective than private sector management, where the Darwinian operation of the market simultaneously encourages efficiency and punishes inefficiency. Non-profit management has come under similar scrutiny in its wake. A recent review of management trends in the non-profit sector in the United States put it succinctly: "The non-profit sector has never been under greater pressure to improve its organizational performance.. Its funders have never been so insistent about economy and results, while its clients have never been more demanding about efficiency and responsiveness. How the non-profit sector does its work is becoming almost as important to funders and clients as what the sector actually delivers by way of goods and services." What is true for non-profits in general is particularly true for nonprofit cultural organizations.

The 'post-Keynesian' consensus (which, like Keynesianism itself, began in the United Kingdom, was picked up rapidly in the United States and then diffused more gradually through the rest of Europe) has now extended deep into received wisdom about the public and non-profit sectors. It has retained many of the instinctive values and analytical approaches that were considered objectionable when first articulated in the 1970s and first implemented in the 1980s.

These changes are manifest in:

  • A lower regard for the concept of public service and generally lower status accorded to working in the public sector than hitherto;
  • A willingness by government and other funders to apply private sector management methods that were previously considered corrosive to the culture of the public and non-profits sectors, such as the use of internal markets, merit pay, performance indicators and other mechanisms of incentivization;
  • A political agenda that gives a high priority to the introduction of private funding into the public sector; that is suspicious of activities where the benefits are not immediately quantifiable or monetized, and that is willing to allow public sector jobs that are broadly comparable with the private sector in terms of responsibility and expertise to fall behind in terms of remuneration.

The post-Keynesian consensus has lost the slightly paranoid edge that could be found in public debate in the 1980s. But government and opposition in most of Europe and in North America remain broadly committed to mechanisms that systematize and numerate public sector and non-profit accountability. These include corporate planning, systems of ongoing review and evaluation, and the use of performance indicators as measures of success.

As a consequence, cultural institutions in receipt of public or foundation funds are under more and more pressure to explain what they do and why they do it and to articulate the ways in which they promote government priorities or meet the program goals of foundations. The relationship between government and national cultural institutions for example has become more contingent, more transparent and more contractual in character, just as it has between central and local government on the one hand and many executive agencies in health, education and welfare on the other.

The impetus to articulate the 'terms of the contract' has come from funders rather than cultural leaders, and the terms of the contract have tended to dwell on funders' preoccupations rather than those of the sector – he who pays the piper at least tries to call the tune. The general trend has left much that is important to cultural institutions – but less important to those who fund them – either mute or bowdlerized.

The democratic imperative

Managerial efficiency is, of course, not the only goal of contractualisation or even the primary one. The dialogue between the funder and the funded has also revolved around the issue of defining the constituencies that cultural institutions should serve and how these constituencies are best served. Every institution in the approximately public domain – from hospitals to central banks to hereditary heads of state – has come under the pressure of growing public accountability over the past twenty-five years and has been forced to develop a more nuanced understanding of who its publics are and how they are best served. Cultural institutions are not exempt from either the general climate or, in many cases, the specific strictures of accountability, and the funding mechanism is only one context – albeit an important one - in which the relationship between a changing society and its cultural institutions is brokered.

Under external pressure, conceptions of good governance are changing, governing boards are growing more diverse and, where they are not, this is viewed as a weakness rather than a strength. Most cultural institutions program with an eye (if not both eyes) on broadening the accessibility of their 'offer', and they try to do this in a way that simultaneously seeks to preserve the authenticity and integrity of their programming. The agenda of access informs - or interacts with - architectural and design values and the whole gamut of ways in which cultural institutions interact with their publics. There is a range of views as to how easily these circles of widening access and commitment to quality can be squared and public statements on this issue are often more upbeat than private ones.

The drive toward broadening access is sometimes informed by marketing considerations. But, significantly, whilst long-term audience development and marketing are often lumped together both organizationally and rhetorically, they are often antithetical to each other in the short to medium term. Marketing is usually aimed at maximizing sales at minimum cost in the medium term, and at an operational level it generates strategies that often do little to broaden social access. Making the content of more established cultural institutions attractive to social groups that do not have the habit or context or language to support at least passive attendance and, ideally, intelligent meaningful engagement, is an expensive, long-term exercise. The methodologies for accomplishing this are in their adolescence if not their infancy; hit and miss in the execution; and require deep pockets, organizational stamina and collective action between institutions to pull off, none of which are distinguishing characteristics of the sector.

Again, in this process of accommodation, some of the sector's own criteria, and organizations' own conceptions of what they are all about – often difficult to express in even the most sympathetic of environments – have become obscure to the more casual observer. Indeed, whole areas of discourse that are central to the role of cultural institutions, such as overt judgments of aesthetic quality and public discussions of the precise character of what has broadly been conceived of as 'high culture', have become convoluted to the point of parody when they are not simply clandestine.

This constitutes a vulnerability. In an environment where definitions of access and interest are necessarily politicised, judgments of cultural value and what merits attention and presentation are, too. The ability of cultural organizations to play an authoritative leadership role in the stewardship of cultural heritage or heritages and their renewal may be compromised.

Managing in difficult times

The arguments outlined above present at least a starting point for an understanding of important common ground between cultural institutions, as increasing complexity of mission is matched by complexity of environment: changes in the ecology of funding and in funders' conception of their responsibilities toward culture; shifts in the use of and pressures on leisure time; the impact of globalisation and its technological and financial 'drivers'; the changing relationships with the formal education sector and the entertainment industry; and the changing demographics of both desired and actual audience and visitor base.

There is equally a range of possible responses by both individual institutions and the sector in general. Some have moved decisively towards greater commercialisation and more aggressive exploitation of intellectual and physical assets, others have moved towards narrower specialization; still others are developing strategic alliances and close collaborations with organizations in adjacent sectors, whether for-profit or non-profit. These are all emerging as responses to the growing competitive pressures that cultural institutions face - the context for culture now. Each in turn has an impact on the core mission of the institution, at least as traditionally conceived, leading ultimately to a need to reexamine the simple issue of whom and what cultural institutions are for at the beginning of the twenty-first century.